XML 53 R14.htm IDEA: XBRL DOCUMENT

INCOME TAXES

9 Months Ended

Sep. 30, 2014

The provision for income taxes as at September 30, are set forth below:

	2014			2013
	(Unaudited)			(Unaudited)
Current
Federal	$	1,061,000		$	922,000
State		18,000			277,000
Prior year (over) under accruals
Federal		10,000			(206,000	)
State		(290,000	)		(244,000	)
Total Expense		799,000			749,000

Deferred Tax Benefit		(1,021,000	)		(1,625,000	)

Net Benefit for Income Taxes	$	(222,000	)	$	(876,000	)

The components of net deferred tax assets as of September 30, 2014 and December 31, 2013 are set forth below:

	September 30,			December 31,
	2014			2013
	(Unaudited)
Deferred tax assets:
Current:
Bad debts		434,000			313,000
Inventory - 263A adjustment		867,000			729,000
Account payable, accrued expenses and reserves		9,000			9,000
Total current deferred tax	$	1,310,000		$	1,051,000

Non- Current:
Capital loss carry forwards	$	1,088,000		$	1,088,000
Section 1231 loss carry forward		4,000			4,000
Stock based compensation - options and restricted stock		526,000			521,000
Capitalized engineering costs		528,000			503,000
Deferred rent		475,000			453,000
Amortization - NTW Transaction		597,000			475,000
Lease Impairment		29,000			51,000
Deferred gain on sale of real estate		183,000			194,000
Total non-current deferred tax assets before valuation allowance		3,430,000			3,289,000
Valuation allowance		(1,092,000	)		(1,092,000	)
Total non-current deferred tax assets after valuation allowance		2,338,000			2,197,000

Deferred tax liabilities:
Property and equipment		(922,000	)		(1,497,000	)
Goodwill - NTW Transaction		(10,000	)		(7,000	)
Amortization - Welding Transaction		(458,000	)		(508,000	)
Total Deferred Tax Liability		(1,390,000	)		(2,012,000	)

Net non-current deferred tax assets	$	948,000		$	185,000

During the year ended December 31, 2013, the Company determined that it no longer needed to provide a valuation allowance on the net deferred tax assets except for the capital loss and section 1231 loss carryforwards. This was based upon the fact that management believed that the net deferred tax assets were more likely than not to be realized. The valuation allowance at both September 30, 2014 and December 31, 2013 was $1,092,000.

The Company has a capital loss carry forward from the sale of Sigma Metals, Inc., the Company’s former subsidiary, of $2,719,000, which will expire in fiscal 2015.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details